The U.S. Securities and Exchange Commission (SEC) has approved stock exchange rule changes that will now allow the listing of options tied to spot bitcoin ETFs. This decision expands the investment opportunities around products that have seen billions of dollars in inflows this year.
According to memos released by the SEC on Friday, the New York Stock Exchange (NYSE) has been given the green light to list and trade options on the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust (BTC), and the Bitwise Bitcoin ETF (BITB). Additionally, Cboe Global Markets has received approval to list and trade options on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).
This approval follows the recent decision by the SEC to approve Nasdaq’s rule proposal to allow the listing and trading of options on BlackRock’s iShares Bitcoin Trust (IBIT). Options are financial derivatives that enable the buying or selling of an underlying asset – in this case, bitcoin ETFs – at a predetermined price on or before a specified date.
Many market participants believe that the introduction of options trading on bitcoin ETFs will attract more institutional investors to the crypto space and enhance overall liquidity. The SEC, in its approval of the NYSE options, stated that it expects options on bitcoin ETFs to provide hedging opportunities, increase liquidity, improve price efficiency, and reduce volatility in relation to the underlying funds. Additionally, the SEC believes that these options will enhance transparency and efficiency in the markets for these and related products.
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Overall, the approval of options trading on bitcoin ETFs by the SEC is seen as a positive development that could attract more institutional investors to the crypto market and improve liquidity and price efficiency. This move could potentially lead to increased interest in cryptocurrencies and contribute to the ongoing growth of the digital asset ecosystem.
